Trump says the US should have the lowest rates in the world
US President Donald Trump, speaking in Doonbeg, Ireland, said that the United States should have the lowest interest rates in the world regardless of the Federal Reserve’s data on inflation and the economy. He told reporters this during the Irish Open golf tournament a few days before the Fed’s next meeting, Channel NewsAsia reports.
Fed meeting
Trump said he did not know whether Fed officials would raise rates at this week’s meeting. The Federal Open Market Committee is due to conclude its meeting on Wednesday. The target range for the federal funds rate currently stands between 3.5% and 3.75%.
The Consumer Price Index, published by the US Department of Labor, showed its largest increase in four months on Friday. This reinforced expectations that the US central bank would raise the target rate range following the meeting.
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Inflation and trade
According to Reuters, price pressures in the United States remain high amid increased import taxes introduced by Trump and rising energy prices linked to the war in Iran. Some Fed officials are concerned that prolonged high inflation could increase the costs of returning it to the target level.
Trump also repeated his threat to halt trade with countries with which the United States has a trade deficit if the Fed does not cut rates. He said that the United States seeks to have a surplus in trade with other countries, or at least a zero balance.
National Economic Council Director Kevin Hassett told Fox News that Trump would defend the independence of Fed Chair Kevin Warsh regardless of the rate decision. At the same time, he added that the president would likely not be pleased by a possible rate increase.
